2020 (12) TMI 1089 - Tri - Companies Law

Restoration of name of the Petitioner Company, on the Register of Companies maintained by the Registrar of Companies - section 252 (3) of the Companies Act, 2013 R/w Rule 87A of the NCLT (Amendment) Rules, 2017 - HELD THAT - Section 248(6) states that the Registrar of Companies, before finally striking off Company, has to satisfy himself that sufficient provision has been made for the realization of all amounts due to the Company and for the payment or discharge of its liabilities and obligations by the Company within a reasonable time, and, if necessary, obtain necessary undertakings from the Managing Director, Director or other persons in charge of the management of the Company. Though the impugned striking off the Company was in accordance with law, the Tribunal has to take into consideration of bona fide contentions of Petitioner seeking to restore name of Company, by taking a lenient view of the issue in the interest of justice and ease of doing business, instead of rigidly interpreting the law on the issue. It is also not in dispute that the instant Company Petition is filed in accordance with law; there are no investigations pending against the Company; the Respondent has not opposed the Petition; and left the issue to Tribunal to consider the case subject terms and conditions. It is true, while exercising jurisdiction of the Tribunal under the provisions of Companies Act, 2013, the Tribunal has to take into consideration the gravest economic condition prevailing in the Country due to pandemic conditions, while considering the issue especially in imposing costs. The Registrar of Companies, Karnataka, the Respondent herein, is ordered to restore the name of the Company in the Register maintained by the Registrar of Companies, Karnataka as if its name had not been struck off from the rolls of the Register, with restoration of all consequential action taken by Registrar of Companies, which includes restoration of DINs of its Directors - Application allowed.

Summary

Issues Involved:
Application for restoration of a company's name on the Register of Companies under Section 252(3) of the Companies Act, 2013.

Detailed Analysis:
1. Background and Facts: The petitioner, a shareholder of the company, sought restoration of the company's name on the Register of Companies. The company was engaged in media and marketing activities but had not commenced commercial operations due to delays in scriptwriting and production. The company had defaulted in filing financial statements for several years, leading to its name being struck off the register.

2. Counter by Registrar of Companies: The Registrar initiated action under Section 248(1) of the Companies Act, 2013, as the company had not filed financial statements for specific years. Notices were sent to the company and its directors regarding the proposed strike-off. Despite no response, the Registrar proceeded to strike off the company's name after following due procedures.

3. Legal Provisions: Section 248(1) empowers the Registrar to strike off a company for non-compliance. However, Section 248(6) mandates the Registrar to ensure provisions for liabilities before striking off. The Tribunal must consider genuine contentions of the petitioner and the interest of justice.

4. Tribunal's Decision: Considering the economic impact of the pandemic and the ease of doing business, the Tribunal decided to restore the company's name subject to certain conditions. The Registrar was directed to restore the name, and the company was instructed to file pending documents and pay a specified cost. The petitioner was responsible for compliance, and the company was to resume operations promptly after restoration.

5. Final Directions: The Tribunal disposed of the application by ordering the restoration of the company's name on the Register of Companies, with specific conditions regarding compliance, payment of costs, and resumption of operations. The order was to be published in the official Gazette, and any further violations would be subject to appropriate actions by the Registrar.

By considering the legal provisions, the facts of the case, and the interests of all parties involved, the Tribunal made a decision that balanced the need for compliance with the Companies Act and the petitioner's request for restoration, taking into account the exceptional circumstances of the pandemic.